Life insurance is not necessarily an exciting topic to discuss. But that is also the reason why many people haven’t taken the time to review what they own.
What is life insurance and why do I need it? Life insurance is an agreement between you (the insured) and an insurer. Under the terms of a life insurance policy, the insurer promises to pay a certain sum to a person you choose (your beneficiary) upon your death, in exchange for your premium payments. Appropriate life insurance coverage may provide you with a feeling of confidence, since you know that those you care about should be financially protected after you die.
Have the lowest cost, or highest performing product available to you?
Consider an analysis of your current coverage:
Do you currently have the appropriate amount and type?
Whether you need more or less, is there anything better available?
Over the last few years, life insurance is one thing that has actually gotten cheaper – and better. Changes in interest rates, mortality rates, and the regulatory environment make today’s products much different than they were even a few years ago. There are many options in the market today that feature longer guarantees, more flexible premiums, and additional features and benefits that were unheard of until recently. Reviewing your life insurance doesn’t have to mean buying more insurance. Much like any other part of your financial strategy, it needs to be something that works perfectly – for your situation.
The Three-Level Approach
Save Money On What You Already Have
Life insurance is one of the few things that has actually gotten cheaper over the last few years. If you haven’t done any cost comparisons, it is likely you could pay less for the coverage you have, get more death benefit for the same cost or find longer guarantees.
Examine The Performance Of Your Existing Products
Based on your annual statements or a projection from your insurance company, your current policy may not be performing up to your expectations when you purchased it. There are elements of your policy that are subject to change, and if left unchecked, your coverage might be in danger of lapse or require significantly more premium than you originally thought. A policy review now can save you from tremendous problems later. You can examine alternatives and make a fully informed decision about what is right for you and your family.
Re-Evaluate Your Life Insurance Needs
Every day, your financial picture changes a little bit. Sometimes there are major life changes, and sometimes there are smaller events that over time can cause you to drift onto a different course. If you feel that your plan requires a more significant examination, we can utilize planning tools that will help you get a handle on your total financial picture. While life insurance may only play a small part of this work, you will gain a more holistic perspective.
No Thanks, My Job Covers My Life Insurance
YOUR NEEDS AND WANTS
• Do you know how much life insurance you need?
• How have your needs changed?
• How much insurance do you need to protect your family?
• What would be an optimal amount of coverage?
• Which of the needs are temporary? When do they go away?
• Will they be replaced by new needs at a later date?
• Which needs are permanent?
• What was the purpose of your insurance when you originally bought it?
• Is that still your purpose or have your priorities changed?
• Marriage or wedding
• Birth or adoption>
• Death in the family
• Child starting high school or college
• Become the legal guardian for another person
• New job or promotion
• Job layoff
• Change in employment benefits
• Critical illness, injury or disability
• Inheritance or other financial windfall
• Financial setback
• Move, relocated or sold home
• Refinanced home mortgage or opened an equity line of credit
• Purchased vacation home
AN ANALYSIS OF YOUR CURRENT COVERAGE
• Has it performed the way it was supposed to?
• Have premiums gone up?
• Have cash values performed near expectations?
• Did your last annual statement notify you that your policy will lapse earlier than expected?
• How has your health changed since you last purchased life insurance?
• Started your own business
• Sold or closed a business
• Become or added a partner
• Hired a key employee
• Significant change in accounts receivable or payable
• Increased business debt
• Anticipating capital expenditure
• Changed ownership structure
• Preparing for succession or ownership change
• Economic conditions
• Fluctuations in fixed interest rates
• Stock market volatility
• Change in income tax or estate tax code
• Legislative changes that affect the insurance industry
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Generally two ways of obtaining financial advice: one is given by stockbrokers, and the other is given by Investment Advisors. While many investors aren’t even aware differences exist, one of the main differences is that investment advisors have a fiduciary duty to act in the best interests of their clients at all times.